Economics: Why We Need Self-Driving Cars

 (Drivebycuriosity) - Car insurances are getting much more expensive these days. The average rate jumped 31% y-o-y ( bankrate). The rise is mainly caused by the climbing number of accidents. Car crashes are very often caused by human failure, like speeding, alcohol abuse, falling asleep, texting & driving, phone calls or other distractions ( source).

But there is a remedy - self-driving cars. Computers have a much shorter response time than humans. They don`t drink and drive, they don´t text while driving. Robots don`t drive aggressively, they don´t take drugs, they aren´t distracted, they don`t feel the need to impress by speedy driving. Self-driving cars do not engage in car races, they don´t do suicide by driving, they don´t fall asleep while driving and they adapt their speed to the traffic situation. They behave strictly rational.

Computers don´t make mistakes and they don´t behave unlawful. A computer needs just a nanosecond to respond to a surprising event (like a child on the street), much faster than a human brain. And with the assistance of sensors the computer can respond to the traffic situation (hydroplaning, ice, potholes) much better than a human driver. As a result self-driving cars have much fewer accident than vehicles driven by human.

Fewer accidents mean less lost lives and save a lot of costs for the economy. They will also translate into lower insurance costs, so driving will get cheaper which also will reduce the costs for Uber, Lyft and taxi rides. 

Self-driving cars are also more efficient, because computers can calculate the optimum speed, track and driving rhythm. Therefore they use less energy to move from place A to place B. Self-driving cars will burn less gasoline which reduces the consumption of fossilized energy and create less exhaust, dampening the greenhouse effect.

Welcome to self-driving cars.

 

Science Fiction: All You Zombies— Five Classic Stories By Robert A. Heinlein

 (Drivebycuriosity) - Robert Heinlein belonged to the ring of masters who developed the science fiction genre (Asimov, Clark, Frederic Pohl wikipedia). Like his colleagues he speculated about the future by appreciating scientific possibilities (hard science fiction).

 His short story "And he built a crooked house" shows what science fiction can do. The plot is based on mathematics and blends the weirdness of quantum physics with cosmology and ancient Hindu mythology about time & infinity. Apparently the basic idea inspired Ted Chiang ("Tower of Babylon") and other writers. 

The story is part of the small collection "All You Zombies— Five Classic Stories" (89 pages amazon). The name giving short story does not contain zombies, but narrates about the paradoxes of time travel and blends it with different topics like sex change, terrorism, paranoia and much more. The weird plot reminds me more of Philllip K Dick than of the Heinlein`s typical engineer tales ("The Moon is a Harsh Mistress")

The collection also contains a horror story, untypical for Heinlein as well.

"Crooked House" alone is worth to get the collection, that - in the moment of writing - is priced with $4.50.

Books: King Of Fools By Frederic Dard

 (Drivebycuriosity) - The french author Frederic Dard belongs to my favorite writers. His crime mysteries - set in Europa in the 1950s - are short, crispy and full of twists & surprises. I especially enjoyed "Bird in a Cage" & ""The Executioner Weeps" ( my reviews here    here). 

The novel "King of Fool" fits to this collection (amazon ). The novel is told in first person - as usual with Dard. The protagonist, a French man, has a surprising encounter with a beautiful English woman, while making holiday at the Cote Azure. The encounter starts a series of unexpected events (this is a spoiler free blog).

The story is heavily constructed, but entertaining. It is hard to believe how the leading characters behave, but I enjoyed following them anyway. Some parts are hilarious like scenes in a Buster Keaton movie, they are literary slapstick. And Dard´s descriptions of persons, events and cities, especially the peculiar presentation of Edinburgh and her population, are a pleasure to read.

 I plan to read more by Dard.

Economics: Is A Shrinking Population Really A Problem?

 (Drivebycuriosity) - There is a lot talk about shrinking  populations. People are getting older, thanks to better medical systems and nutrition; and birthrates are falling in all developed countries. In China & Japan the population is already shrinking, Europe and even the US may follow. If we believe the Cassandras the world is doomed. I beg to differ.

First, I think a smaller population is a big win for the environment and could be the answer to global warming, another favorite subject of the doomsayers. 

Fewer people burn less energy - and they emit fewer greenhouse gases. Fewer people also eat less; therefore the incentive to destroy forests, to gain more land for farming, becomes weaker and the problem of over-fishing disappears.

A shrinking population also slows down the trend of turning forests & meadows into the sprawl: fewer people stops the trend of constructing more and more one-family houses, streets, strip malls, store houses & parking places. A shrinking population makes the world greener & cleaner!

A smaller population is also the answer to another doomster alert: "The robots are coming" And: "Automation will destroy our jobs!"  (" thehill). Both trends are mostly compensating each other: A falling demand for workers, thanks to automation, compensates a declining supply by shrinking populations.

 

Industrial Revolution 

Machines have been replacing labor for many centuries. In the middle ages wind & water mills already substituted human & animal labor. In the 18th century followed steam power, starting the industrial revolution. In the recent centuries the ongoing automation process has been raising productivity of labor considerably - and the progress has been accelerating. 

Artificial Intelligence (AI) is raising the productivity of labor even even further, reducing the demand for human workers even more. DeepSeek, the newest incarnation of the technological progress, is another step in the ongoing progress to more productivity. Microsoft CEO Satya Nadella claims that Moore´s law is "working in hyperdrive" (finance.yahoo ).

And there is more: science is making exponential advancements in the field of robotics and artificial intelligence and will support the economy and the labor markets in the coming decades. 

      Less Work, More Income

Today even farmers are using robots, for instance for harvesting strawberries or milking cows (wikipedia). Drones are being used in warehouses and yards for inventory management. Robots also help restaurants to deal with the scarcity of labor.  

"Domino’s Pizza Inc. is putting in place equipment and technology that reduce the amount of labor that is required to produce our dough balls", reports time.com. 3D-printers are also replacing workers, even in construction. "A 3D printer can build the walls of a house in as little as two days versus weeks or months with traditional construction materials" notices today.com.  

 A study by economists John G. Fernald and Charles I. Jones from Stanford & the Federal Reserve Bank of San Francisco claims that "it becomes possible to replace more and more of the labor tasks with capital" (robinhanson ). Fernald & Jones define capital as physical capital (machines including robots & computers), plus human capital (knowledge & skills) plus discovery of new ideas (inventions like computer, internet etc.). According to them "artificial intelligence and machine learning could allow computers and robots to increasingly replace labor in the production function for goods", meaning that the society can produce more things without increasing hours worked or even with a shrinking labor force. As a result the growth rate of income per person and the long-run growth rate (now around 2%) will rise as well: "The possibility that artificial intelligence will allow machines to replace workers to some extent could lead to higher growth in the future.

 

                 Universal Basic Income

Naive observers claim that a shrinking population reduces the demand for goods & services and will destroy many markets and businesses (noahpinion). These pessimists ignore that demand is the number of potential buyers multiplied with the purchasing power per capita. Thanks to the accelerating technological progress the purchasing power per capita is rising and will overcompensate the shrinking number of consumers.

We can learn from history: In England the bubonic plague (1348 Black Death ) reduced the English population by about 30%. As a result the living standard of the survivors climbed! The reduced workforce caused higher salaries and the diminished population lowered the demand for food and cut food prices ( driveby).

I reckon that technological progress leads to:

    - rising salaries (for those still working), 

    - climbing dividend incomes and stock market gains 

which will raise the purchasing power of most people - enough to compensate the shrinking number of buyers. Even those who don`t invest in the stock market may participate via pension funds and insurance investments. 

The productivity gains will finally translate into higher tax revenues for the governments (by taxing company profits, dividends & stock market gains). Some day a much greater part of goods & services will be produced by robots and other machines. Then fewer people may work than today and many things will cost less. Then the time could come for an universal basic income, paid to everybody, and financed by productivity gains delivered with automation (driveby ).
 

 

 

 

 

 

Science Fiction: Darwinia - A Novel Of A Very Different Twentieth Century

 (Drivebycuriosity) - Alternate history is fun. An author can run his fantasy without limits and change the past as much as he wants. Robert Charles Wilson`s novel Darwinia - A Novel Of A Very Different Twentieth Century displays a very spooky past (amazon ). 

In the year 1912 a weird event suddenly changed the world. The European continent, including England, disappeared. Cities & people vanished and the European civilization got replaced by an apparently untouched wilderness with strange unknown plants & animals. Soon Americans, Australians and others are resettling the European coasts, rebuilt the cities and begin to explore the strange hinterland. 

The plot splits into 3 lines and follows different protagonists in America and Europe. "Darwinia" begins like a classic adventure story, set in an exotic, almost fairy tale, environment, but becomes more and more violent and turns then into a horror thriller with paranormal elements. The plot expands into cosmology, quantum physics, Buddhist mythology and theology. 

I enjoyed the mysterious start of the novel but I found the growing violence and the expansion into mythology and crude philosophy rather challenging. Robert Charles Wilson wrote better books, including "Blind Lake" ( amazon) & "Spin" ( amazon).